SELF-REPORTED EMOTIONAL DISTRESS AND CREDIT DISCOURAGEMENT: RACIAL DIFFERENCES AMONG INDIVIDUAL MICROENTREPRENEURS IN BRAZIL

PAIXÃO Marcelo () and Irene Rossetto ()
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PAIXÃO Marcelo: African and African Diaspora Studies Department, The University of Texas at Austin, Gordon-White Building, 210 W 24th St, Austin, TX 78705, USA
Irene Rossetto: Population Research Center, The University of Texas at Austin, Austin, TX, USA

Journal of Developmental Entrepreneurship (JDE), 2024, vol. 29, issue 01, 1-23

Abstract: Research has shown that credit discouragement is one of the most significant barriers deterring small businesses from accessing credit. Although credit discouragement is often associated with diminished expectations for successfully obtaining credit, the underlying causes of this phenomenon have not been explored fully. Adapting Loury’s (2021) feedback effect theory to the credit market, this study provides insights into the effect of race and emotional distress on credit discouragement among individual microentrepreneurs (IMEs) in Brazil. Using survey data collected in Rio de Janeiro and Salvador, the study confirms that Black and Brown IMEs who reported emotional distress in bank branches had a greater credit discouragement rate than those who did not. We also confirmed Brazil’s pigmentocratic pattern of inequality, with higher discouragement among Black IMEs compared to Brown and White IMEs.

Keywords: Credit discouragement; race; feedback effect; emotional distress; Brazil (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S1084946724500031

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